IDEAS home Printed from https://ideas.repec.org/p/ags/motuwp/292902.html

Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings

Author

Listed:
  • Crichton, Sarah
  • Stillman, Steven
  • Hyslop, Dean

Abstract

New Zealand has a comprehensive accident insurance system, administered by the Accident Compensation Corporation (ACC), which both pays the direct medical and rehabilitative costs of all accidental injuries and compensates all workers 80 percent of their earnings for any time postinjury that they are unable to work. This paper uses data from Statistics New Zealand’s experimental Linked Employer-Employee Database (LEED) to examine the effect of suffering an injury on individual labour market outcomes. The experimental LEED database contains monthly information on ACC, benefit and earnings receipt for all New Zealanders over the three-year period from April 1999 to March 2002. Using receipt of ACC earnings compensation as a proxy for being injured, we examine the effect of injuries on employment and benefit rates, earnings and benefit income. Individuals who are injured and receive earnings compensation are unlikely to be a random sample of the working population. For example, workers in particular industries and occupations are likely to be more exposed to hazardous situations. Thus, we estimate the effect of injury by comparing the observed changes in labour market outcomes for our injured population with a matched ‘control’ group of non-injured individuals who have similar observed characteristics as the injured population. We allow the magnitude of these effects to differ for individuals with different lengths of time receiving ACC compensation as a proxy for the severity of injury. We find that injuries which result in more than three months of earnings compensation have negative effects on future labour market outcomes. For example, individuals who receive four months’ compensation have 2-4 percent lower employment rates, 2 percent higher benefit receipt rates, and 6-8 percent lower monthly income six months after compensation ends than comparable non-injured workers. For individuals who receive seven to nine months of compensation, these negative effects are larger, with employment rates 8-10 percent lower, benefit rates 7 percent higher, and monthly income 13-17 percent lower. Furthermore, these negative effects remain at a similar magnitude 12 months after compensation ends.

Suggested Citation

  • Crichton, Sarah & Stillman, Steven & Hyslop, Dean, 2004. "Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings," Motu Working Papers 292902, Motu Economic and Public Policy Research.
    • Handle: RePEc:ags:motuwp:292902
    DOI: 10.22004/ag.econ.292902
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/292902/files/Returning-to-Work-from-Injury-Longitudinal-Evidence-on-Employment-and-Earnings.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.292902?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Schurer, Stefanie, 2017. "Bouncing back from health shocks: Locus of control and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 1-20.
    3. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 569-590, January.
    4. Márta Bisztray & Anikó Bíró & João G. da Fonseca & Tímea Laura Molnár, 2023. "Accident-induced absence from work and wage ladders," IFS Working Papers W23/30, Institute for Fiscal Studies.
    5. Emmanuel Duguet & Christine Le Clainche, 2014. "The Effect of Non-Work Related Health Events on Career Outcomes: An Evaluation in the French Labor Market," Revue d'économie politique, Dalloz, vol. 124(3), pages 437-465.
    6. Adrian Chadi & Laszlo Goerke, 2015. "Missing at Work – Sickness-related Absence and Subsequent Job Mobility," IAAEU Discussion Papers 201504, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    7. Peter Anderson, 2025. "Compensating Differentials for the Risk of Reinjury – Lessons from Professional Boxing," Journal of Sports Economics, , vol. 26(2), pages 148-171, February.
    8. Emmanuel Duguet & Christine Le Clainche, 2014. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues / Maladies chroniques et accidents : une évaluation de leur impact sur le parcours professionnel et les revenus," Working Papers halshs-00966970, HAL.
    9. McAllister, Susan & Derrett, Sarah & Audas, Rick & Herbison, Peter & Paul, Charlotte, 2013. "Do different types of financial support after illness or injury affect socio-economic outcomes? A natural experiment in New Zealand," Social Science & Medicine, Elsevier, vol. 85(C), pages 93-102.
    10. Francisco Parro & R. Vincent Pohl, 2021. "The effect of accidents on labor market outcomes: Evidence from Chile," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1015-1032, May.
    11. Florian Fouquet & Lisa Meehan & Gail Pacheco & Alice Theadom, 2024. "The effect of a minor health shock on labor market outcomes: The case of concussions," Health Economics, John Wiley & Sons, Ltd., vol. 33(12), pages 2838-2853, December.
    12. Emmanuel Duguet & Christine Le Clainche, 2020. "The Socioeconomic and Gender Impacts of Health Events on Employment Transitions in France: A Panel Data Study," Journal of Human Capital, University of Chicago Press, vol. 14(3), pages 449-483.
    13. Halla, Martin & Zweimüller, Martina, 2013. "The effect of health on earnings: Quasi-experimental evidence from commuting accidents," Labour Economics, Elsevier, vol. 24(C), pages 23-38.
    14. Yulia Chikish & Brad R. Humphreys, "undated". "The Impact of Health Shocks on Worker Performance: Evidence from Professional Sports," Working Papers 24-06, Department of Economics, West Virginia University.
    15. Chadi, Adrian & Goerke, Laszlo, 2018. "Missing at work – Sickness-related absence and subsequent career events," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 153-176.
    16. Gabriele Mazzolini, 2020. "The Economic Consequences of Accidents at Work," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1068-1093, October.
    17. repec:ctc:serie1:def15 is not listed on IDEAS
    18. Galizzi, Monica & Leombruni, Roberto & Pacelli, Lia, 2023. "Severe work disabilities and long-lasting losses," Labour Economics, Elsevier, vol. 85(C).
    19. Emmanuel Duguet & Christine le Clainche, 2012. "Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues," Working Papers 12-02, LAMETA, Universtiy of Montpellier, revised Jan 2012.
    20. Mohamed Ali Ben Halima & Camille Regaert, 2015. "Quel est l’impact de la survenue d’un accident du travail sur la santé et le parcours professionnel ?," Working Papers DT68, IRDES institut for research and information in health economics, revised Jul 2015.
    21. Collischon, Matthias & Hiesinger, Karolin & Pohlan, Laura, 2023. "Disability and Labor Market Performance," IZA Discussion Papers 16100, IZA Network @ LISER.
    22. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2010. "An Inquiry Into The Theory, Causes And Consequences Of Monitoring Indicators Of Health And Safety At Work," SIRE Discussion Papers 2010-120, Scottish Institute for Research in Economics (SIRE).
    23. Mario Lackner & Hendrik Sonnabend, 2023. "Presenteeism when employers are under pressure: evidence from a high‐stakes environment," Economica, London School of Economics and Political Science, vol. 90(358), pages 477-507, April.
    24. Gabriele Mazzolini, 2014. "The economic consequences of accidents at work," DISCE - Working Papers del Dipartimento di Economia e Finanza def015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:motuwp:292902. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/motuenz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.